Baroness Anelay of St. Johns: My Lords, I thank the Minister for his explanation of the order. I begin my remarks by making it clear that I support the making of the order. The full implementation of the ruling of the European Court of Justice on the Broadcasting Act 1990 arises from the view that it expressed in September 1996. In practice, the order will remove the last anomaly of the now defunct domestic satellite system regime, which was ended in 1997 by the satellite television service regulations.

There is now no logical place for a division between the domestic and the non-domestic satellite services market. It is far more sensible and rational to have a unified satellite market. Under the previous arrangements, the all-satellite broadcasters were defined as non-domestic, although BSkyB, which is a British company, invests considerably in this country each year. We therefore support the removal of the last vestiges of that division, which is now redundant.

The proposals also start in train the removal of a further division within the broadcasting market. Opening the market for UK homes outside the current franchise area is indeed an exciting new development in the world of television, and will enable about another 4 million homes in future to have access to the latest multi-media entertainment. For example, those north of the Border in the Highlands will almost certainly be able to benefit from a major change--that is, the introduction of multi-media entertainment--in a way that was previously impossible for them. The expanding and ever-developing world of transmission will therefore allow millions of homes to experience quality far beyond that which is provided by any analogue service. As one of those who has just recently changed to digital, I certainly appreciate the advantages, as Woking, where I live, suffers from poor aerial reception. Like others, I welcome the developments in digital and other methods of delivery of communications.

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The previous Conservative government were fully aware of the need to free up the market and sought to do so when they deemed it appropriate. They took the view that allowing growth through small, exclusive cable franchises was the best initiation to a broader, non-exclusive, cabled Britain. The present Government consider that now is the time to allow PTOs--like the Minister, I shall use the abbreviation--access to those areas of Britain not yet covered by franchises. They also see 2001 as the appropriate time for competition throughout Britain.

The Minister said that the commitments in Broadband Britain would be fully met by the administrative means that he has outlined. Can the Minister confirm that primary legislation will be needed to achieve the final removal of broadcast restrictions, and, if so, when is it planned to introduce that legislation to the House? I welcome the freeing up of the market, as I have mentioned previously, but I hope that sufficient time has been allowed to enable smaller operators to compete with the larger networks of PTOs. Naturally I am aware that the cable sector was able to contribute to the consultation exercise that preceded the publication of Broadband Britain last April. I hope that its views and concerns have been taken properly into account. It is the cable companies and other new entrants which have made significant strides in providing broadband capability, innovation and competition in the core telephony market.

In an era of rapidly changing technology, an environment is now being created that should enable computer, media and telecommunications companies to provide telephone, television and computer services. The lower costs of much of this new technology are spurring on the creation of that environment.

The creation of a healthy, competitive cable services market is an important step in the continuing multi-media revolution. It will bring entertainment to many who otherwise would have missed out. This is an exciting and fascinating time in the development of multi-media and digital services. All these technologies will make an important contribution to building superhighways throughout the country, providing a wide spread of the population with access to advanced services in the digital information age. We are therefore happy to support the Government in this matter, which we hope will continue the development of a better overall service for the whole of Britain.

5.43 p.m.

Lord McNally: My Lords, like the noble Baroness, we on these Benches support this order. However, it is worth noting that this is secondary legislation dealing with an important and powerful industry or group of industries. It is important that Parliament does not allow secondary legislation simply to slip by, particularly as regards broadcasting where, quite frankly, it has proved almost impossible for primary legislation to keep up with the pace of technological change. Therefore of necessity successive governments have had to build into

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broadcasting legislation powers of secondary legislation which are nevertheless extremely significant. This is also a significant order.

As I know that the Minister maintains a close interest in these matters I should place on record the fact that I am the president of the British Radio and Electronic Equipment Manufacturers' Association (BREMA). However, I am assured by that association that manufacturers have no direct interest in this order. I am present by order of our Whips. However, it is interesting to remember that originally BT was kept out of the cable industry because the previous government did not want an overlarge cuckoo in the cable nest while the cable industry was developing. However, as is so often the case, technology has simply bypassed that restriction by means of the digital revolution and technology convergence. Therefore I think we are right to sweep away that provision as outdated.

I wish to put two points to the Minister in this context. In relation to Broadband Britain he referred to the need for action on the part of the ITC and Oftel. However, we now have the ITC, the DTI, Oftel, the department of culture and heritage, the OFT and the European Commission all with fingers in the regulatory pie as regards the converging electronic media. At the same time the various bodies are taxed in different ways. Competition laws affecting various parts of the electronic media are either different or are still to be tested by the new Competition Act. I accept fully that the Government are committed to genuine competition in the industry. Technology allows such divergence and choice and yet there is a danger of dominance in the sector by global multi-media empires.

Today BT does not regard other public telephone operators as its major competitors. Its major competitors are News International, United Newspapers, EDS, IBM or Microsoft. These are powerful players in separate markets now entering a converging market. These powerful players may have been governed in the past by separate regulatory and tax regimes. Towards the end of his remarks the Minister mentioned my next point. I hope that when the Government consider this industry or group of industries, they will consider that there is a need for an assessment of how these powerful vested interests will be kept under proper political and parliamentary surveillance. As I say, we are talking about powerful forces. Many of the regulatory regimes are relatively untested. What is also untested is the political will power to ensure the convergence of technologies and the power that that brings will be properly addressed.

I believe that new primary legislation will be needed in the near future to make sure that the various regulatory bodies, the various taxation regimes and the various national and international controls on these technologies are subjected to--I mention an overworked phrase--a level playing field. It is an important matter. Although this is just one order laid under the provisions of an Act, it is part of an important trend on which Parliament should continue to keep a close eye.

Lord McIntosh of Haringey: My Lords, I am grateful to both noble Lords for the welcome that they

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have given to the order and the principles behind it. I am particularly grateful to the noble Lord, Lord McNally, for placing the order in its proper historical context. As the noble Lord said, the regulation of broadcasting and communications in its widest sense is a constantly moving matter. We cannot expect legislation in one decade to last until the following decade, or even more than a few years at any time.

Perhaps I may deal first with a point made by the noble Baroness, Lady Anelay, about the decision by the European Court of Justice. That is much more trivial than the noble Baroness thinks, if she does not mind my saying so. The European Court of Justice remarked on an oversight under which the 1997 regulations did not amend the Broadcasting (Restriction on the Holding of Licences) Order 1991. There was no practical consequence to that oversight as the 1991 order merely prohibited PTOs from holding a licence category which no longer existed. There never has been any restriction on the non-domestic satellite service licence on which all satellite licences are now based. So we are using the opportunity of this order to amend the 1991 order to correct this minor point.

I am grateful to the noble Baroness for saying that this extension of competition was anticipated by the previous government. I do not agree with her that the right approach in 1990 was to set up individual cable companies with exclusive licences in particular parts of the country. I remember that when the Cable and Broadcasting Bill was before the House in 1984 the only Members in any part of the House who said that cable would take a great deal longer to reach a large part of the population were myself and the late Lord Hill of Luton, who knew what he was talking about even if I did not. The idea that 15 years later we should have reached only 87 per cent. of Britain using the exclusive licence technique confirms what we said then. I hope that Charles Hill is listening to my remarks.

The noble Baroness asked whether this was the final removal of broadcast restrictions. I adopt the view of the noble Lord, Lord McNally, that it is becoming increasingly impossible to distinguish between broadcasting and telecommunications. That is what our Green Paper, Regulating Communications: Approaching Convergence in the Information Age, is about. There will still be a need for primary legislation in regard to telecommunications. Some of that will affect what we now consider to be broadcasting. However, it is not our intention and we have no plans at present to introduce further primary legislation in relation to broadcasting.

The noble Baroness asked for an assurance that there had been adequate consultation with the cable companies. I assure her that there has been very detailed consultation with the companies and with everyone else concerned. In particular, our Regulating Communications Green Paper was a consultative document. The consultation period ended on 30th November last year. We are now considering the responses and will place our conclusions before Parliament as soon as we possibly can.

I am slightly surprised at the comments of the noble Lord, Lord McNally, on secondary legislation. I thought that we were doing rather well to carry out so many of

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the objectives of Broadband Britain by administrative means without bothering Parliament with them. The ITC had those powers and, with our encouragement, has been able to use them. However, the noble Lord is right, in that primary legislation cannot keep up. In due course there will have to be further primary legislation in relation to the whole range of these issues.

Although we have rejected the view of the then National Heritage Select Committee in another place that there should be a communications ministry, I believe the noble Lord will recognise that our plans on the regulatory side bring together the regulation of broadcasting and telecommunications in a way that I hope he will welcome.

The noble Lord raised the issue of global multi-media empires. I remind him that existing regulation provides that national public telecommunications operators with a turnover of more than £2 billion are prohibited from taking part in licences for Channel 3 and Channel 5. That covers BT, and those restrictions are still in place.